From my perspective, this enforcement action and its settlement is yet another example of the ways in which the companies that are getting hit with ESG-related claims are not the ESG laggards, but rather the companies that have tried to portray themselves as proactive on ESG-related issues. This action is one of several actions over the last couple of years in which the defendant company’s touted ESG efforts fall short of representations or failed to live up to stated standards.
For example, all of the enforcement actions in which the SEC’s Climate and ESG Task Force has been involved show this same pattern. For example the first Task Force’s actions involved alleged misrepresentations by the Brazilian mining company, Vale, made in the company’s sustainability report (as discussed here). The task force’s action against BNY Mellon – similarly to the action described above pertaining to Deutsche Bank’s investment adviser subsidiary – involved allegations pertaining to the bank’s ESG funds, as described here. In each of these cases, the allegations were not that the target companies were ESG laggards but that they had claimed too much in trying to establish their ESG credentials.
‘Enforcement 40’ for 2020
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